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Marketers Alarmed Over Dangote Petrol Price Delay as Fuel Costs Increase

Published by Tope Fakinlede on September 10th, 2024.

Marketers Alarmed Over Dangote Petrol Price Delay as Fuel Costs Increase

Aliko Dangote

Oil marketers are expressing concern about the delay in setting the price for petrol produced by the Dangote Petroleum Refinery. This comes as the landing cost for imported petrol has risen to approximately ₦1,120 per litre.

Marketers are worried that if Dangote sets a high price for its petrol, it could lead to increased imports, as the government has opened the market for competition. The Major Oil Marketers Association of Nigeria had reported in July that the landing cost was ₦1,117 per litre. While petrol prices ranged from ₦600 to ₦700 per litre in July, the Nigerian National Petroleum Company Limited recently raised prices to between ₦855 and ₦897 per litre, with some independent dealers charging over ₦1,000 per litre.

The delay in announcing Dangote’s petrol price is leading marketers to intensify talks with their foreign partners about potential imports. Abubakar Maigandi, National President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), noted that if Dangote’s price is high, marketers will consider importing petrol.

Maigandi explained that IPMAN is waiting for price data from its international partners to compare with Dangote’s pricing. He emphasized that competition in the market would help ensure availability and drive down prices.

A Dangote Group official, who chose to remain unnamed, stated that Alhaji Aliko Dangote is committed to reducing petrol prices for Nigerians, regardless of whether the Nigerian National Petroleum Company Limited (NNPC) becomes a buyer. The official cited previous successes in reducing diesel prices and expressed confidence in achieving similar results with petrol.

Despite ongoing discussions, the NNPC and Dangote refinery have not yet reached an agreement on pricing and distribution. The NNPC has stated it will not purchase Dangote petrol unless it is cheaper than international market prices. The NNPC also affirmed that it has no plans to be the exclusive distributor for Dangote’s petrol and emphasized that domestic refineries can sell directly to marketers.

The NNPC’s stance suggests a continued reliance on fuel imports, with government refineries still not operational. Dangote had initially anticipated a quick rollout of petrol from his refinery, but delays in negotiations with the NNPC could mean sustained high import costs until domestic refining capabilities are fully functional.